The Lowry says plans by the Royal Opera House to set up a Manchester base threatens its viability. Photograph: Don McPhee

Ambitious plans by the Royal Opera House to create a northern outpost in Manchester were dealt a blow today after the Lowry arts centre publicly declared the project a direct threat to its existence and called for it to be scrapped.

The Lowry, which opened at Salford Quays nine years ago at a cost to the public of £116m, is angry that the latest proposals would see it lose two regular visitors that it regards as "jewels": Opera North and Birmingham Royal Ballet.

Those in charge of the Lowry have, until now, largely kept their counsel on the proposals.

However, today the chairman of the Lowry trustees, Rod Aldridge, said the plan was "bad for Manchester, bad for the arts and bad for the taxpayer". He added: "In the interests of the whole region, it must now be abandoned."

He said the Lowry had commissioned its own research to look at the ROH proposals and what it would mean for them. Aldridge said it "provides clear evidence that the current proposal presents significant threats to the viability of the Lowry. It would destroy what we have achieved and would put the £116m of public money invested at severe risk".

The Lowry says it is not against the Royal Opera House coming to Manchester and has proposed an alternative model whereby opera and music is concentrated at the ROH's planned home, the Palace theatre, and the Lowry becomes the centre for dance, hosting the Royal Ballet.

In the months of meetings that have gone on since the idea emerged last year, three alternatives were put to the Lowry on its possible future. These included concentrating on more musicals; producing its own original work; or reinventing itself as a Sadlers' Wells of the north by staging more non-classical dance. The Lowry insists none of these are viable.

Ultimately the ROH's plans will rest on the support of the government, which will have to commit a significant amount of money to a project costing about £100m, even before annual running costs.

Andy Burnham, the former culture secretary and a north-west MP, was a supporter of the scheme, but it is not known how keen his replacement in the rec ent reshuffle, Ben Bradshaw, is.

The Lowry yesterday sent an open letter to Bradshaw, Arts Council England, Manchester city council and the ROH, calling for the scheme, in its current form, to be scrapped.

The Lowry's chief executive, Julia Fawcett, said the centre had always made clear that it was in favour of the ROH being in Manchester, but not at its expense. "At the moment there is no upside for us, just a huge risk," she said.

The Manchester plans, conceived and driven by the ROH – under its chief executive Tony Hall – and the city council, are undeniably ambitious. It would see the city's 117-year-old Palace theatre renovated and transformed into a new base for the ROH outside Covent Garden. As well as staging opera and ballet productions, it would host works developed specifically for Manchester.

The plan is seen as a good thing for Manchester-based orchestras, including the Hallé, the Manchester Camerata and the BBC Philharmonic, which would provide the music for most of the Royal Opera performances. And the biennial Manchester International Festival would be expected to reap the benefits as well.

A statement from the ROH expressed disappointment at the Lowry stance. It said: "The Royal Opera House and Manchester city council believe that there is a very exciting and viable way forward for Royal Opera House Manchester and the arts in the north-west as a whole.

"Discussions are ongoing regarding how this might most effectively be achieved, and the more potential partners are brought into the discussions, the more exciting the proposals are becoming."

Sir Richard Leese, leader of Manchester city council, said he was disappointed with the position taken by the Lowry. "The prospect for jobs, skill development, the economic impact for tourism and the welcome addition to the cultural scene in the region will benefit all."